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While 'renovator's dream' is often interpreted as real estate-speak for 'run down mess', such homes can actually have unrealised potential.

When hunting for real estate, it's tempting to purchase a property in a pristine condition ready for you to move right in, but sometimes it's best to fight your initial reservations and be a little more creative in your real estate search.

In a new episode of Selling Houses Australia, Andrew, Charlie and Shaynna visit a run down, cyclone-damaged beach shack in Campwin Beach, QLD. Despite its shabby state, it's got million dollar views overlooking the gorgeous turquoise ocean and pristine white sand. While some visitors were quick to suggest demolition, the team are determined to prove there's life left in this charming beach house.

The view from the Campwin Beach house, before the Selling Houses team arrived

Why buying the worst house in the best street can be profitable

"As a property developer, I always look for opportunities to add value to a property and not be reliant on the market to do the heavy lifting for me," says Rob Flux, property developer, educator and mentor at his business, Property Developer Network. "The old 'worst house in the best street' philosophy is the perfect example of where this can be achieved. Using your own sweat equity can uplift the value of a property, through either a cosmetic or structural renovation, or perhaps even an extension."

Need more convincing? Lauren Goudy, buyers agent at Sydney-based firm Rose & Jones, believes buying a property in an over-developed area is a very risky investment strategy, with buyers often lured into buying brand new homes through offers of incentives, free items 'thrown-in' (like shiny new ovens and premium-brand white goods) and first home buyers schemes.

"The reality is these features are not unique or special and are easily achieved in any location," Lauren says. "Investments in these high-volume developments will not perform as well as investments in more tightly-held locations."

The projected rate of population growth in Australia shows we have an undersupply of property in our major capital cities and will continue to do so for the foreseeable future.

Lauren says buying a property with good bones - if a little run down - in a fabulous, sought-after position that's in high demand and low in supply will have far greater capital growth than an investment where there are multiple properties of similar quality.

What to consider when looking for your 'renovator's dream'

If you're looking to make a solid investment, search for a property where the things you can change - like the floor plan, storage and built-in appliances - are less than ideal, but the things you can't change - like the location, aspect and block size - are desirable.

While a seasoned property developer has a shrewd eye for properties with untapped potential, it's important to bear in mind there's a difference between a fixer-upper and a money pit. Before you commit any of your savings, have a building inspector check out the property to make sure it's not hiding any secrets you don't already know about and can't afford to fix.

"It is very easy to be overly optimistic about your own renovation skills and the value that you will add to the property," Rob says. "Be sure to do your homework and ensure that there is enough pricing disparity between your property and the rest of the street to capture the value you are hoping to add."

If you're buying a property that's $50,000 under the median price in the street but your planned renovations will cost you $80,000, then you aren't really in front, says Rob.

Rob also strongly suggests you engage a licensed builder to oversee any renovation works you carry out on the property.

"While it's tempting to save a few dollars and do most of the work yourself, most states actually have a requirement that a builder must oversee the project once it reaches a minimum dollar value of works," says Rob.

You can still carry out the work yourself, but once it's complete, a builder must sign off to certify the building is safe, of a suitable standard and fit for purpose. Failure to do so may mean that the works are not legal, thus voiding your insurance or potentially endangering people's lives.

Lauren's advice is to buy a property which will stand out and stand the test of time and look at historical evidence to gain an indication of future returns.

"Do your due diligence and research the market thoroughly or engage a professional to do this for you," she says.

Can Shaynna and Charlie turn around the fortunes of this forgotten beach house in Campwin Beach? Selling Houses Australia continues on Wednesdays, 8.30pm on Lifestyle.